ummm.... wait, if you've pluggd teh PC into the Modem and the laptop into the router which then goes to the modem, it wont work....
its gotta be both the pc and laptop into router, then router to modem.

Bit confused. In your first post you say you have them both connected to the router. In your last post you say one is connected to the modem and the other to the router?

If you do have one plugged into the modem and the other into the router then they are not in the same LAN. You have set up two LANs. You need to either put them in the same LAN by connecting both to the same device or changing settings in the router to enable them to see each other.

Google on how to set up Windows file sharing between XP and Vista. Once you have set up and can see shared folders between the two computers then then you'll have no problems with games.

Just a note on red (crossover) cables. Most network devices are auto sensing these days and will adjust the signal path depending on which type cable is used. Which is why cables now come in more than just blue and red.